Porter's Five Forces

What’s Porter’s five forces? It is a simple but powerful tool for understanding where power lies in a business situation. I think it is quite useful and helpful for an organization to enter a market or even essential for an organization which is already in the market. The five forces help me to understand both the strength of the current competitive position.

 

From Porter’s five force, I understand that a company shouldn’t just concentrate with his business only compete with his competitor, that’s not enough. This is because in the market, not just the competitor will be the only one who will affect your profit and successful.

 

 

The five forces are: Supplier power, buyer power, and competitive rivalry, threat of substitution and threat of new entry. Different market would have different forces made by different part of environment. This five forces are micro. Giving an example, market of shampoo. The threat of entry is not so difficult. When you got enough capital, you may enter the market,. In addition, the bargaining power of buyers are quite high, as the market has different large and small origination. There are lots of substitute, the market provide lots of choice for buyer. Therefore buyers got a very high bargaining power. With the same reason, the threat of substitution is high. There are lots of different brands, Dove and Dettol etc. However, the bargaining power of supplier might not be so high, because they could use different raw materials to produce their final product. The company can use different substitution for their product ingredients.

 

I believe this forces must be suitable for every market for many years. Because it shows different forces which will affect the company. From the five forces, you could know what is the company’s weakness, and the avoid taking wrong steps by thinking wrongly for your organization. http://www.youtube.com/watch?v=mYF2_FBCvXw

After watching the Five Forces through this link, I am surely understand and more clearly know how to use this five forces into different market and industry, as what he have said, for airline industry, it would be easy to enter but hard to bargin with buyers. In reality, nowadays, people discover and creates many different' 'clever' products. There are lots of substitutes. It really depends how your product can be survive in yor own market, and this five forces will definitly can help you!!

Management models through the years and presentation for this week

Here’s come to the week with old management theory. Even though it’s not new, but it’s still kind of useful.

This week, I have learnt some of the new management theory, for instance, Mary Parker Follett, Max Weber and Frederick Taylor. They are new to me. Taylor’s theory is about the scientific management which is to create a science of factory production. I understand that Taylor theory is to provide the best job to the right person. This could lower down the cost for spending the wrong thing from a wrong person. Taylor also said that we should train and teach and develop the worker to follow the defined procedures so that they would know clearly what they should do.

 Apart from that, I believe a successful organization need kind of harsh policy. For example, Weber and Fayol both said we need to have rules and regulations to the workers, so that they will ensure what they did and force themselves to finish some target. I think this would a quite useful for most of the organization. It’s because if workers feel a bit pressure, they will try their best to work hard. Moreover, with specialization, they can be improved with their own skills, this could also increase the company output and productivity.

In addition, after the mini tutorial group, I understand more about Google structure. I know more about how they improved their organization from only a few person to a large company. Its structure and management theory are now clearly in my mind, and it would be useful for my future.

Lastly, is about my presentation in the previous week. It was a fantastic experience for us to train our braveness. We try our best and try to practice as smooth as we can. We also learn from other classmates on how they perform. I found that, we have to ignore the people who would made you nervous. We should be confident by practicing more and more. And we should also try to memorize as much as we can but not just presenting what we have written on our script. Therefore, we can get a higher marks next time we got presentations.

Organisational structure (week 3)

It has come to my week 3 of my University life. This week, Business and Management has taught a lot of new and important terms. And it comes to the new section about organizational structure which includes four main component. They are the division of work, centralization and decentralization, matrix structure and also span of control and chain of command. They are all important to an organization and different organization would have different types of structure. There would be different changes for them when they face internal and external environment. In the following, I would like to tell you some of the special elements which an organization needs.

 

Through doing the Business report, I know more about those elements. For example, I am doing HSBC. Their division of work depends on products and services and customers. But of course they need more customers. They products and services are mostly for customers. HSBC is a large organization which the practice of dividing a job, task, assignment, or contract into smaller tasks do exist. Subtasks are often distributed to functional areas such as operations, finance, production, or marketing. They may also be assigned to individuals.

 

Apart from division of work, we also got centralization. From the lecture, I know that most of the big company are centralization. This is because big company has trick and tight policy. They need easier management. This would also reduce the overhead costs. For mini company, they would like to satisfy local needs. They would like to enlarge their market share. Through their decisions, they would know what customers’ needs are. In reality, Google is a special organization. They are having decentralization. Because their staff have their choice to do what they want to do, they can have their rest area.

 

I found that span of control and chain of command are the most interesting part. Because every organization would need to face this. It kind of tricky, the larger the organization, the more people and staff. They need to choose they want a wider span of control or chain of command. However, this would lead to different structure and problem for an organization. A bank would have a tall structure but their decision will make slower. Take HSBC as an example, HSBC in no doubt is in tall structure. It gets long chain and also with wide spans of control. They have different kinds of functions for each layer, like managers and employee, they got their use in the bank. One is providing new resources and products to public and customers. Managers supervise subordinates. For a bank, it has a very tight control. They seldom have big contradiction for their decisions between managers and subordinates.

 

It’s quite an interesting and amazing topic for this week. It makes me know that, the different organization would lead to have different structure. But the utmost I remember is structure and performance are directly proportional. And I believe that’s true, a strong structure would lead to successful easier.

The first week and lessons for Business and Management

It has been a fruitful week in the previous University life. I got to learn new things deeply compared to my high school life in HK.

 

The studying environment here is totally different from my home country. We got plenty of time to study by ourselves which was call self-study. It was totally different from the teachers in high school which just give us most of the book knowledge and keep on memorizing business book.

 

The previous week, I have had a Business law and Business and Management lesson. It was quite interesting even it just talk about introduction. For Business and Management, I don’t feel too much difficult for my first week, I bet it’s because it’s just an introduction. I have learnt about organization and Management. I learnt some common features in organizations such as, people, target, manager and structure. We have discussed them individually. Each organizations need to have a well communication and structure to become successful. I have also learnt the definition for it. However, only memorizing it is not enough, we need to deeply know what it means. I remember the tutor told us her 5 years old daughter can memories it, so what’s the difference between her daughter and us!

 

In addition, we learnt the role of management too. For example, each company would produce more than their input. They would intake people, materials and resources to provide customers services, goods and also waste which damage the environment.

 

For the basic structure of organisations, there are operational core and support. Organisation support and the top management, But of course the utmost important, middle management. This shows the front line and how direct they would help us when we need them. Some of them would be the backup, some will transfer their services, and some will support their front line.

 

Moreover, we have also learnt lots of different types of organisations. For example economic, public service, social enterprise, protective, social or associative and political organsations. These organization acts as different parties. Some would earn income from customers, some would help people who are in need. For University of Sussex, it was a educational organization. It provide education for us.

 

Lastly, we have learnt the utmost important about management. They are in the work of Herny Mintzberg and also Henri Fayol. Mintzberg combines ten management roles and he divided these into three groups, ie, informational, interpersonal and decisional. Fayol also set out 6 managerial activities, ie, forecasting, planning, organizing, commanding, coordinating and also controlling. This two person is very important for us to learn about Business and Management.